Over the last decade, the financial services industry has become increasingly complex and confusing. The main reason pertains to a blurring of responsibilities and expertise among financial professionals. This occurred as banks bought brokerage and investment management firms. Insurance companies merged or were acquired by banks. In a few instances banks owned both brokerage and insurance operations.
Along with all the mergers and acquisitions was the proliferation of titles and designations that include financial planner, financial consultant, financial advisor, and wealth manager, to name a few. Professional designations and degrees include CPA, CFP, ChFC, CLU, MBA, CFA, and PhD. All of the preceding designations may be involved with investing in one form or another. This could include the sale of financial products to the sale of nothing (i.e., pure investment management or asset management). CFA is a recognized designation among professionals involved with investment management. Three rigorous exams over several years must be passed covering portfolio theory, security selection and evaluation, and ethics. Ideally, one member associated with a firm has the designation. Educationally speaking, an MBA or equivalent is most relevant. If a firm has a PhD in Finance, all the better.
In our professional opinion, if you are searching for an independent financial professional that will be dedicated to protecting your best interests, you must search for one who sells nothing and charges a fee to manage your investment account. Beyond the question of fee for service, one must know what questions to ask which may include: